If you have a household employee, you may need to withhold and pay Social Security and Medicare taxes (FICA), pay federal unemployment tax (FUTA), or both.
Some examples of workers who do household work include the following. • Babysitters • Housekeepers • Caretakers • Maids • Domestic workers • Nannies • Drivers • Private nurses • Health aides • Yard workers • House cleaning workers.
Taxpayers with household employees must file Schedule H, Household Employment Taxes, with their Form 1040 to report FICA (Social Security and Medicare) tax, FUTA (federal unemployment) tax, and federal income tax withholding (if any). Form W-2 must be filed for each household employee who was paid Social Security or Medicare wages of $2,000 (2016) or more, or wages of any amount if federal income tax was withheld. Taxpayers who are required to file Schedule H with their 2016 individual tax returns must obtain an Employer Identification Number (EIN) by January 31, 2017